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While sickening thousands, killing 170 people and being declared a global health emergency, the coronavirus is starting to affect supply chains in and out of China.

FedEx, no stranger to flying cargo to and from the country, is “very much exposed” by the early stages of a supply chain crunch, said Tom Goldsby, Haslam Chair of Logistics at the University of Tennessee’s Department of Supply Chain Management.

China’s coronavirus outbreak, concentrated in the city of Wuhan, has prompted the World Health Organization to declare a global health emergency. U.S. health officials reported the first domestic case of a person-to-person spread of the coronavirus, USA TODAY reported Thursday.

“Only now are we starting to see concerns about the movement of freight,” Goldsby said.

Freight Investor Services said in a Tuesday note that the coronavirus “is likely to have a huge impact on the economy,” particularly in China. The outbreak has some resemblance to China’s SARS outbreak that ran from late 2002 to 2003, it said.

As manufacturing plants in and around Wuhan are idled from the outbreak, cargo flows from China will begin to be slow “perhaps pretty severely,” Goldsby said. The same goes for inbound cargo, he said, if people in China remain cautious about going out and buying goods.

Passengers wear masks to protect against the spread of the coronavirus as they arrive on a flight from Asia at Los Angeles International Airport.(Photo: Mark Ralston / Getty Images)

FedEx said it “is adhering to all regulations and guidelines from Chinese authorities related to containment of the coronavirus,” adding that restrictions may affect shipments to, from and within Wuhan.

FedEx expects the slowdown in China specifically to continue through the first half of 2020 with improvement possible in its second half, Chief Marketing Officer Brie Carere said in December.

How will supply chains react?

The global economy remains heavily dependent on China, but many companies have already reduced their dependence on and footprints in the country. Nearly 30% of respondents to a U.S.-China Business Council survey slowed, delayed or canceled investment in the U.S. or China due to trade tensions.

“The word of the day in recent times, as far as supply chains go, is contingency planning,” Goldsby said. “How can we be prepared for any challenges supply chains might face?”

A contingency plan for an epidemic will differ from tariffs stemming from trade wars. Due to the coronavirus outbreak, some freight will need to be redirected from commercial flights that have been suspended, said Doug Barry, director of communications at the U.S.-China Business Council, of which FedEx is a member.

“The ultimate cost will depend on the spread of the disease, its lethality and duration, and the government’s response to it,” Barry said. “We have not yet seen the bottom of this abyss.”

If supply chains become clogged, some cargo designated to be moved by ocean could shift to the air, Goldsby said, perhaps on a FedEx Express plane. The cargo would have to be high value or in urgent need of shipping, he said, as moving goods by air is much more expensive than moving goods by water.

Airlines keeping tabs on flight crews

For pilots and flight crews at airlines like FedEx Express, not much can be done in terms of protection beyond canceling flights to certain areas of China, said Aero Consulting Experts CEO Ross Aimer.

Major U.S. airlines have provided face masks, gloves and hand disinfectants to crews flying into the region, Aimer said.

“They strongly suggest crews to wash their hands often, avoid touching face with hands and definitely stay away from areas where animals are butchered and sold,” he said of what airlines communicate to their crews.

A woman wearing a medical mask checks in passengers at a China Eastern desk at John F. Kennedy International Airport in New York.(Photo: Justin Lane / European Press Agency)

FedEx said in a statement it’s providing surgical masks, hand sanitizer and alcohol wipes to employees and vendors, while also “disinfecting facilities in areas where outbreaks have occurred.”

“We are also encouraging our team members to take any signs of illness seriously and seek medical attention as needed,” the company said.

Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651 and on Twitter @MaxGarlandTypes.